Tax time is amongst us, and it’s the perfect time to think about how you’ll use your tax refund. You may be itching for another holiday, or have the desire to learn a new set of skills
that come with a qualification.
Either way, when you get that extra “bonus” money into your account, it’s important to realise that it only happens once a year.
Perhaps you missed out on a tax refund because you owed more tax than what was deducted from your paycheck, or you spent your last refund on an emergency car repair. Now that this year is different, you may have the luxury of choosing what to spend your tax refund on.
What Australians spend their tax refund on
According to a poll
run in 2015 by ASIC MoneySmart, this is what some of their users spent their tax refund on:
- Bills (29%)
- Savings (21%)
- Loan or credit card payments (13%)
- Received no refund (16%)
- Home loan payments (9%)
- Holiday (5%)
- Other things e.g education, car rego (5%)
- Household appliances (2%)
However, Finder.com.au ran a survey last year with 2,003 taxpayers participating and the results came out that 46%
would put their refunds straight into savings instead.
As you can see, the spending habits of Australians change over time depending on the current economy. It may also be a generational thing where there is a growth in millennials
still bunking in at home with their parents while they put money towards a house deposit, saving costs on rent in some major Australian cities.
If you’re still deciding what you should do once you make that yearly visit to the accountant
), here are some excellent ways you can spend your tax refund on:
Money-smart uses for your tax refund
- Invest in your education.
- Boost your savings.
- Travel overseas.
- Start your own business or side hustle.
1. Invest in your education.
You may have been eyeing on a particular course at Upskilled
and love the added benefits of studying online. If you want to move up the ranks in your career, or simply have the passion for learning, investing in your education is a great way to spend your tax refund.
Not only will you have the opportunity to upskill, a qualification can improve your employment prospects
and can even give you the added benefit of feeling a great sense of accomplishment when completing a course.
Did you know that Upskilled provides a discount of 15%
when you pay your course fees upfront? You won’t have to worry about adding in another repayment schedule in your bills, and you’ll have plenty of courses to choose from in IT, business, marketing, HR and community services.
Not only that, most courses can be completed within 12 months or earlier. Since you can complete the qualifications online, you can go at a pace that suits you, helping you juggle study with work and other personal commitments.
Investing in your education gives your life a sense of purpose and direction, especially if you’re itching for a career change
. Either way, you will get a Return of Investment (ROI) with studying as it can help open up doors for you.
2. Boost your savings.
Your savings account may be on the low and needs a bit of a top up, or you probably don’t have any savings to put towards emergencies
for that matter. It’s a good idea to put your tax refund in a High Interest Savings Account (HISA) because not only is it a low-risk investment
, you get to see your money grow with bonus interest being added month-on-month (depending on your bank).
In some cases, you will have a variable rate of up to 3% in a HISA
and this could mean seeing more money come through your account. Boosting your savings not only gives you financial security, but it also helps you manage your finances better.
In addition, a tax refund can kickstart the momentum you need when picking up good saving habits
. This helps you make empowering decisions on money, spending less on useless things and saving more.
In fact, you may be in your 20s wanting to give your super a boost
too. Not only is it a clever way to use your refund, but compound interest gets better with time, making your ROI in savings even larger.
3. Travel overseas.
If it’s been a while since you’ve actually taken a break from your job and you’re experiencing some of the symptoms of burnout
, you may need to book yourself a trip somewhere and explore the horizons of something that is unfamiliar.
Sometimes we need to shake things up in life and move away from the comfort of routine, and travel to a destination
we’ve never set foot before. Travelling not only provides an awesome break from work, you will learn about the cultural and social aspects of another country.
You may want to do something meaningful in your life and have the desire to travel and volunteer your time
for people in need.
There are plenty of volunteer programs
where you can live abroad for a couple of weeks at time, teaching people how to read and speak English or building schools or shelter for the citizens living in unfortunate circumstances.
Receiving a tax refund is not only a great incentive to book travel plans with your family or friends, spending your money on experiences
could actually make you a happier person.
4. Start your own business or side hustle.
Have a passion project you’d like to invest more in? While it’s hard work, sometimes having a project on the side
is worthwhile. You may have been thinking about turning it into a full-fledged business but don’t have money to spend on the resources to grow its hidden potential.
With your tax refund money, you can choose to invest in your side hustle
and have some kick-start money for your business. It can be tough to start and grow your own business but if you’re smart when it comes to your tax refund, you will use it sparingly and be knowledgeable about a start-up’s non-negotiable expenses.
You may want to start a business
but don’t feel comfortable running one unless you have the skills needed to be good at it. Upskilled offers two online courses in small business: BSB42618 - Certificate IV in New Small Business
or BSB42518 - Certificate IV in Small Business Management
. Doing these courses will help you manage budgets, develop work priorities and assist in marketing a small business.
The ROI in starting your own business doesn’t come without its risks but if you’re strategic enough, your tax refund money could be the reason for its starting success.
Want a larger ROI on your tax refund?
Investing in online education
is a great way to make the most of your tax refund. With the flexibility of online study, you can study anywhere at any time and with Upskilled being a leading RTO, you’re in good hands.
Upskilled has plenty of courses to choose from in IT, business, marketing and more. You can read some of the success stories
where past students have either felt “job-ready” when completing a course, or how further study has helped them progress into a better job.
If you’re ready to study and are keen to spend your tax refund on a qualification that will provide meaning and purpose, start your course search
and contact one of Upskilled’s friendly education consultants today.
This article should not be taken as expert financial advice. Please consult a financial specialist for further advice on your circumstances.